Consider "Under the direction of my handlers I was told to encourage leaders and members of civil rights groups to commit felonious acts." Wood goes on to describe a type of sting operation that the FBI still carries out today. An undercover operative infiltrates a group that seems dangerous and encourages them to commit a crime like a bombing. They even go as far as supplying fake explosives. Then when the plot has progressed right up to the moment of enactment, they swoop in, arrest everyone, and declare they have foiled a deadly attack.
Wood was involved in such an operation, and his involvement was reported in the press before the assassination. The arrests were made Feb 16 1963, and were reported in the evening papers that day.
Source Desert Sun, Volume 38, Number 167, 16 February 1965 https://cdnc.ucr.edu/?a=d&d=DS19650216.2.11&e=-------en--20--1--txt-txIN--------1 (and attached)
What's new is the accusation that the men were arrested so they would be "kept away from managing Malcolm X's Audubon Ballroom door security on February 21, 1965", and Wood's claim that "On February 21, 1965 I was ordered to be at the Audubon Ballroom, where I was identified by witnesses while leaving the scene. Thomas Johnson was later arrested and wrongfully convicted to protect my cover and the secrets of the FBI and NYPD."
This last part seems a little odd, as his cover was already blown by being reported in the newspaper. After three months undercover, he would surely have been known by sight to many people other than those arrested. He also does not state what he was doing there, however, Thomas 15X Johnson was identified at the scene as a gunman. So if "Thomas Johnson was later arrested and wrongfully convicted to protect" Wood's cover, then that would imply that Wood himself was a gunman - which seems like it should have been the main point to clarify here.
It's also odd that a three-month sting operation would be set up just to remove two members of Malcolm X's door security detail five days before the regular weekly OAAU meeting at the Audubon. That would give plenty of time to arrange replacements or reschedule. Wood specifically says that this was his assignment.
FBI and police involvement is certainly not out of the question, but this letter is really not clear evidence of what the involvement was.